Not an Accident

Roger Federer earned more than $100 million a year at his peak, split between prize money and endorsements. He also happened to live in Wollerau, canton Schwyz, population roughly 4,500 — one of the lowest-tax addresses in one of the lowest-tax countries in Europe. That's not a coincidence.

Federer is Swiss by birth, so the lump-sum regime that features elsewhere in this series was never on the table for him — that arrangement is reserved for foreign nationals who don't work in the country. What he did instead was simpler, and available to any Swiss resident: pick the canton.

Federal, Cantonal, Communal

Switzerland taxes in three layers — federal, cantonal and communal — and the cantonal layer varies enormously. For a high earner, the gap between a low-tax canton and a high-tax one runs 10 to 15 percentage points on the effective marginal rate. That's not a rounding error at Federer's income. It's tens of millions of dollars over a career.

• Zug, Schwyz, Nidwalden, Obwalden
  Relative tax level: Low

• Zurich
  Relative tax level: Moderate

• Geneva, Vaud, Jura
  Relative tax level: High

Federer chose Schwyz deliberately. Michael Schumacher, during his own Swiss years, made a comparable calculation on a different canton — the point isn't which one wins, it's that canton choice inside Switzerland does real work even after the country choice is already settled.

The Endorsement Layer

Prize money is taxed under a patchwork of withholding rules that vary by tournament country — a US Open cheque and a Wimbledon cheque don't arrive with identical treatment. Endorsement income works differently: for a global athlete, it's standard practice to license image rights through a corporate structure rather than receive sponsorship money as personal income. That's legitimate, but only when the corporate entity has real substance and the pricing between athlete and company would hold up at arm's length. A shell with a bank account and nothing else is the version that gets challenged. Worth remembering before the next entry in this series, where crossing exactly that line cost someone close to €19 million.

Why the Same Logic Works Below $100 Million

Almost no client is Federer-scale, but the structure underneath his arrangement isn't really about scale. Three things translate directly, whatever the income level:

Sub-jurisdiction choice matters wherever it exists. Swiss cantons, US states, Spanish autonomous regions all create material tax variance inside a single country's borders, and most people never check before they move.

Corporate structures for image or IP rights can be entirely legitimate, provided there's real substance behind them and the internal pricing would survive scrutiny.

Personal residency is the anchor. No amount of structuring compensates for getting the residency itself wrong — that's the one decision everything else depends on.

Getting the Layers Right

A sub-jurisdiction residency review looks at your specific income mix — employment, endorsement or licensing, investment — against the actual canton, state or region you're weighing, not just the country. Bring your income breakdown and your shortlist of locations; you'll leave with a ranked comparison, not a table of tax rates copied off the internet.

General information based on public reporting. Canton and sub-jurisdiction selection requires local tax advice specific to your situation, and this article isn't a substitute for it.